<PAGE> 1
PROSPECTUS - SEPTEMBER 28, 1999
MORGAN STANLEY DEAN WITTER
[GRAPHIC]
EQUITY FUND
A MUTUAL FUND THAT SEEKS TOTAL RETURN
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
The Fund Investment Objective ..................................................................... 1
Principal Investment Strategies .......................................................... 1
Principal Risks .......................................................................... 1
Fees and Expenses ........................................................................ 3
Additional Investment Strategy Information ............................................... 4
Additional Risk Information .............................................................. 4
Fund Management .......................................................................... 5
Shareholder Information Pricing Fund Shares ...................................................................... 7
How to Buy Shares ........................................................................ 7
How to Exchange Shares ................................................................... 8
How to Sell Shares .......................................................................10
Distributions ............................................................................11
Tax Consequences .........................................................................12
Share Class Arrangements .................................................................12
Financial Highlights ..........................................................................................19
Our Family of Funds ...........................................................................Inside Back Cover
This Prospectus contains important information about the Fund.
Please read it carefully and keep it for future reference.
</TABLE>
<PAGE> 3
THE FUND
[TARGET GRAPHIC] INVESTMENT OBJECTIVE
- ------------------------------------------------
Morgan Stanley Dean Witter Equity Fund seeks total
return.
[CHESS PIECES] PRINCIPAL INVESTMENT STRATEGIES
- ----------------------------------------------------------
TOTAL RETURN
An investment
objective having
the goal of
selecting securities
with the potential
to rise in price
and pay out
income.
The Fund will normally invest at least 65% of its
total assets in common stock and other equity
securities. The Fund's "Sub-Adviser," Miller Anderson
& Sherrerd, invests the Fund's assets by pursuing an
investing strategy that combines both value and
growth styles. The Fund has two teams of portfolio
managers: a value team and a growth team. Each
manager works independently within the style of his
or her specific team. Each team has a team leader who
participates in administering the value/growth
style-tilt of the portfolio and monitors certain
other oversight functions.
The Sub-Adviser's investment process is designed to
identify growing companies whose stock in the
Sub-Adviser's opinion is attractively valued and has
low but rising expectations, and to diversify
holdings across all market sectors. Individual
securities are selected based on, among other
things, quantitative screens and fundamental
research by in-house industry analysts.
Common stock is a share ownership or equity interest
in a corporation. It may or may not pay dividends, as
some companies reinvest all of their profits back
into their businesses, while others pay out some of
their profits to shareholders as dividends. A
depository receipt is generally issued by a bank or
financial institution and represents an ownership
interest in the common stock or other equity
securities of a foreign company.
In addition, the Fund may invest up to 25% of its
total assets in foreign securities. This percentage
limitation, however, does not apply to securities of
foreign companies (including depository receipts)
that are listed in the U.S. on a national securities
exchange. The Fund also may invest in convertible and
fixed-income securities.
In pursuing the Fund's investment objective, the
Sub-Adviser has considerable leeway in deciding which
investments it buys, holds or sells on a day-to-day
basis -- and which trading strategies it uses. For
example, the Sub-Adviser in its discretion may
determine to use some permitted trading strategies
while not using others.
[SCALE GRAPHIC] PRINCIPAL RISKS
- ------------------------------------------
There is no assurance that the Fund will achieve its
investment objective. The Fund's share price will
fluctuate with changes in the market value of the
Fund's portfolio securities. When you sell Fund
shares, they may be worth less than what you paid for
them and, accordingly, you can lose money investing
in this Fund.
Common Stocks. A principal risk of investing in the
Fund is associated with its common stock investments.
In general, stock values fluctuate in response to
activities specific to the company as well as general
market, economic and political conditions. Stock
prices can fluctuate widely in response to these
factors.
Foreign Securities. The Fund's investments in foreign
securities (including depository receipts) may
involve risks in addition to the risks associated
with domestic securities. One additional risk is
currency risk. While the price of Fund shares is
quoted in U.S. dollars, the Fund generally converts
U.S. dollars to a foreign market's local currency to
purchase a security in that market. If the value of
that local currency falls relative to the U.S.
dollar, the U.S. dollar value of the foreign security
will decrease. This is true even if the foreign
security's local price remains unchanged.
1
<PAGE> 4
Foreign securities also have risks related to
economic and political developments abroad, including
expropriations, confiscatory taxation, exchange
control regulation, limitations on the use or
transfer of Fund assets and any effects of foreign
social, economic or political instability. Foreign
companies, in general, are not subject to the
regulatory requirements of U.S. companies and, as
such, there may be less publicly available
information about these companies. Moreover, foreign
accounting, auditing and financial reporting
standards generally are different from those
applicable to U.S. companies. Finally, in the event
of a default of any foreign debt obligations, it may
be more difficult for the Fund to obtain or enforce a
judgment against the issuers of the securities.
Securities of foreign issuers may be less liquid than
comparable securities of U.S. issuers and, as such,
their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are
generally subject to less government and exchange
scrutiny and regulation than their U.S. counterparts.
In addition, differences in clearance and settlement
procedures in foreign markets may occasion delays in
settlements of the Fund's trades effected in those
markets and could result in losses to the Fund due to
subsequent declines in the value of the securities
subject to the trades.
Many European countries have adopted or are in the
process of adopting a single European currency,
referred to as the "euro." The consequences of the
euro conversion for foreign exchange rates, interest
rates and the value of European securities the Fund
may purchase are presently unclear. The consequences
may adversely affect the value and/or increase the
volatility of securities held by the Fund.
Other Risks. The performance of the Fund also will
depend on whether the Sub-Adviser is successful in
pursuing the Fund's investment strategy. The Fund is
subject to other risks from its permissible
investments including the risks associated with
convertible and fixed-income securities. For more
information about these risks, see the "Additional
Risk Information" section.
Shares of the Fund are not bank deposits and are not
guaranteed or insured by the FDIC or any other
government agency.
2
<PAGE> 5
[MONEY GRAPHIC] FEES AND EXPENSES
- --------------------------------------------
The table below briefly describes the fees and
expenses that you may pay if you buy and hold shares
of the Fund. The Fund offers four classes of shares:
Classes A, B, C and D. Each Class has a different
combination of fees, expenses and other features. The
Fund does not charge account or exchange fees. See
the "Share Class Arrangements" section for further
fee and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
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<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES SHAREHOLDER FEES
These fees are paid ---------------------------------------------------------------------------------------------------
directly from your Maximum sales charge (load) imposed on
investment. purchases (as a percentage of offering price) 5.25%(1) None None None
---------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
ANNUAL FUND price or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
OPERATING EXPENSES ---------------------------------------------------------------------------------------------------
These expenses are ANNUAL FUND OPERATING EXPENSES
deducted from the Fund's ---------------------------------------------------------------------------------------------------
assets and are based on Management fee 0.85% 0.85% 0.85% 0.85%
expenses paid for the ---------------------------------------------------------------------------------------------------
period July 29, 1998 Distribution and service (12b-1) fees 0.25% 1.00% 0.78% None
through May 31, 1999. ---------------------------------------------------------------------------------------------------
Other expenses(5) 0.28% 0.28% 0.28% 0.28%
---------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.38% 2.13% 1.91% 1.13%
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Reduced for purchases of $25,000 and over.
(2) Investments that are not subject to any sales
charge at the time of purchase are subject to a
contingent deferred sales charge ("CDSC") of
1.00% that will be imposed if you sell your
shares within one year after purchase, except for
certain specific circumstances.
(3) The CDSC is scaled down to 1.00% during the sixth
year, reaching zero thereafter. See "Share Class
Arrangements" for a complete discussion of the
CDSC.
(4) Only applicable if you sell your shares within
one year after purchase.
(5) "Other Expenses" are estimated based on expenses
anticipated for the first complete fiscal year of
the Fund.
Example
This example is intended to help you compare the cost
of investing in the Fund with the cost of investing
in other mutual funds.
The example assumes that you invest $10,000 in the
Fund, your investment has a 5% return each year, and
the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower,
the tables below show your costs at the end of each
period based on these assumptions depending upon
whether or not you sell your shares at the end of
each period.
IF YOU SOLD YOUR SHARES:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------------------------
<S> <C> <C>
Class A $658 $939
Class B $716 $967
Class C $294 $601
Class D $115 $360
</TABLE>
IF YOU HELD YOUR SHARES:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------------------------
<S> <C> <C>
Class A $658 $939
Class B $216 $667
Class C $194 $601
Class D $115 $360
</TABLE>
Long-term shareholders of Class B and Class C may pay more in sales charges,
including distribution fees, than the economic equivalent of the maximum
front-end sales charges permitted by the NASD.
3
<PAGE> 6
[CHESS PIECES GRAPHIC] ADDITIONAL INVESTMENT STRATEGY INFORMATION
- ---------------------------------------------------------------------
This section provides additional information relating
to the Fund's principal strategies.
Convertible and Fixed-Income Securities. The Fund may
invest up to 35% of its total assets in (i)
convertible securities (which may be rated below
investment grade commonly known as "junk bonds"),
(ii) investment grade fixed-income securities of
domestic and foreign companies and governments and
international organizations, and (iii) U.S.
government securities.
Defensive Investing. The Fund may take temporary
"defensive" positions in attempting to respond to
adverse market conditions. The Fund may invest any
amount of its total assets in cash or money market
instruments in a defensive posture when the
Investment Manager believes it is advisable to do so.
Although taking a defensive posture is designed to
protect the Fund from an anticipated market downturn,
it could have the effect of reducing the benefit from
any upswing in the market. When the Fund takes a
defensive position, it may not achieve its investment
objective.
Portfolio Turnover. The Fund may engage in active and
frequent trading of portfolio securities to achieve
its principal investment strategies. The portfolio
turnover rate is not expected to exceed 200% annually
under normal circumstances. A high turnover rate,
such as 200%, will increase Fund brokerage costs. It
also may increase the Fund's capital gains, which are
passed along to Fund shareholders as distributions.
This, in turn, may increase your tax liability as a
Fund shareholder. See the sections on "Distributions"
and "Tax Consequences."
The percentage limitations relating to the
composition of the Fund's portfolio apply at the time
the Fund acquires an investment and refer to the
Fund's net assets unless otherwise noted. Subsequent
percentage changes that result from market
fluctuations will not require the Fund to sell any
portfolio security. The Fund may change its principal
investment strategies without shareholder approval;
however, you would be notified of any changes.
[SCALE GRAPHIC] ADDITIONAL RISK INFORMATION
- ------------------------------------------------------
This section provides additional information relating
to the principal risks of investing in the Fund.
Convertible Securities. The Fund's investments in
convertible securities subject the Fund to the risks
associated with both fixed-income securities and
common stocks. To the extent that a convertible
security's investment value is greater than its
conversion value, its price will likely increase when
interest rates fall and decrease when interest rates
rise, as with a fixed-income security. If the
conversion value exceeds the investment value, the
price of the convertible security will tend to
fluctuate directly with the price of the underlying
equity security. The convertible securities in which
the Fund may invest may be below investment grade.
Securities below investment grade are commonly known
as "junk bonds" and have speculative characteristics.
Fixed-Income Securities. All fixed-income securities
are subject to two types of risk: credit risk and
interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be
unable to make interest payments and/or repay the
4
<PAGE> 7
principal on its debt. While the Fund invests in
investment grade fixed-income securities, certain of
these securities have speculative characteristics.
Interest rate risk refers to fluctuations in the
value of a fixed-income security resulting from
changes in the general level of interest rates. When
the general level of interest rate goes up, the
prices of most fixed-income securities goes down.
When the general level of interest rates goes down,
the prices of most fixed-income securities goes up.
Accordingly, a rise in the general level of interest
rates may cause the price of the Fund's fixed-income
securities to fall substantially.
Year 2000. The Fund could be adversely affected if
the computer systems necessary for the efficient
operation of the Fund's "Investment Manager," Morgan
Stanley Dean Witter Advisors, Inc., the Sub-Adviser,
the Fund's other service providers and the markets
and corporate and governmental issuers in which the
Fund invests do not properly process and calculate
date-related information from and after January 1,
2000. While year 2000-related computer problems could
have a negative effect on the Fund, the Investment
Manager, the Sub-Adviser and their affiliates are
working hard to avoid any problems and to obtain
assurances from their service providers that they are
taking similar steps.
In addition, it is possible that the markets for
securities in which the Fund invests may be
detrimentally affected by computer failures
throughout the financial services industry beginning
January 1, 2000. Improperly functioning trading
systems may result in settlement problems and
liquidity issues. In addition, corporate and
governmental data processing errors also may result
in production problems for individual companies and
overall economic uncertainties. Earnings of
individual issuers will be affected by remediation
costs, which may be substantial and may be reported
inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may
be adversely affected.
[FACES GRAPHIC] FUND MANAGEMENT
- ------------------------------------------
MORGAN STANLEY DEAN
WITTER ADVISORS INC.
The Investment Manager is
widely recognized as a
leader in the mutual fund
industry and together
with Morgan Stanley Dean
Witter Services Company
Inc., its wholly-owned
subsidiary, has more than
$136 billion in assets
under management or
administration as of
August 31, 1999.
The Fund has retained the Investment Manager --
Morgan Stanley Dean Witter Advisors Inc. -- to
provide administrative services and manage its
business affairs. The Investment Manager has, in
turn, contracted with the Sub-Adviser -- Miller
Anderson & Sherrerd, LLP - to invest the Fund's
assets, including the placing of orders for the
purchase and sale of portfolio securities. The
Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global
financial services firm that maintains leading market
positions in each of its three primary businesses:
securities, asset management and credit services. Its
main business office is located at Two World Trade
Center, New York, New York 10048.
The Sub-Adviser manages assets of approximately $62.4
billion as of March 31, 1999 for investment
companies, employee benefit plans, endowments,
foundation and other institutional investors. The
Sub-Adviser is an indirect subsidiary of Morgan
Stanley Dean Witter & Co. The Sub-Adviser's address
is One Tower Bridge, West Conshohocken, Pennsylvania.
The portfolio managers, currently six in total, are
divided into two teams: a value team and a growth
team. Each team has three members: one member of each
team serves as the designated team leader. The value
team includes Nicholas J. Kovich, James Jolinger and
Robert J. Marcin. The growth team includes Arden C.
Armstrong, Brian Kramp and Gary G. Schlarbaum. Mr.
Kovich and Mr. Kramp are the
5
<PAGE> 8
respective team leaders. Ms. Armstrong, Mr. Kovich,
Mr. Marcin and Mr. Schlarbaum are Managing Directors
of the Sub-Adviser and have been managing portfolios
for the Sub-Adviser for over five years. Mr. Jolinger
is a Principal of the Sub-Adviser and the Director of
Research; he has been associated with the Sub-Adviser
since 1994 and prior to that was an equity analyst
with Oppenheimer Capital (1987-1994). Mr. Kramp is a
Vice President of the Sub-Adviser and has been
affiliated with the Sub-Adviser since 1997; prior to
that he was an analyst/portfolio manager with
Meridian Investment Company (1984-1997).
The Fund pays the Investment Manager a monthly
management fee as full compensation for the services
and facilities furnished to the Fund, and for Fund
expenses assumed by the Investment Manager. The fee
is calculated at the annual rate of 0.85%. The
Investment Manager pays the Sub-Adviser compensation
equal to 40% of its compensation for services and
facilities furnished to the Fund.
6
<PAGE> 9
SHAREHOLDER INFORMATION
[MONEY GRAPHIC] PRICING FUND SHARES
- ----------------------------------------------
The price of Fund shares (excluding sales charges),
called "net asset value," is based on the value of
the Fund's portfolio securities. While the assets of
each Class are invested in a single portfolio of
securities, the net asset value of each Class will
differ because the Classes have different ongoing
distribution fees.
The net asset value per share of the Fund is
determined once daily at 4:00 p.m. Eastern time, on
each day that the New York Stock Exchange is open
(or, on days when the New York Stock Exchange closes
prior to 4:00 p.m., at such earlier time). Shares
will not be priced on days that the New York Stock
Exchange is closed.
The value of the Fund's portfolio securities is based
on the securities' market price when available. When
a market price is not readily available, including
circumstances under which the Investment Manager
and/or Sub-Adviser determine that a security's market
price is not accurate, a portfolio security is valued
at its fair value, as determined under procedures
established by the Fund's Board of Trustees. In these
cases, the Fund's net asset value will reflect
certain portfolio securities' fair value rather than
their market price. In addition, if the Fund holds
securities primarily listed on foreign exchanges, the
value of the Fund's portfolio securities may change
on days when you will not be able to purchase or sell
your shares.
An exception to the Fund's general policy of using
market prices concerns its short-term debt portfolio
securities. Debt securities with remaining maturities
of sixty days or less at the time of purchase are
valued at amortized cost. However, if the cost does
not reflect the securities' market value, these
securities will be valued at their fair value.
[HANDSHAKE GRAPHIC] HOW TO BUY SHARES
- --------------------------------------------
CONTACTING A
FINANCIAL ADVISOR
If you are new to the
Morgan Stanley Dean
Witter Family of Funds
and would like to contact
a Financial Advisor, call
(800) THE-DEAN for the
telephone number of the
Morgan Stanley Dean
Witter office nearest
you. You may also access
our office locator on our
Internet site at:
www.msdw.com/
individual/funds
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative.
Your Financial Advisor will assist you, step-by-step,
with the procedures to invest in the Fund. You may
also purchase shares directly by calling the Fund's
transfer agent and requesting an application.
Because every investor has different immediate
financial needs and long-term investment goals, the
Fund offers investors four Classes of shares: Classes
A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares
offers a distinct structure of sales charges,
distribution and service fees, and other features
that are designed to address a variety of needs. Your
Financial Advisor or other authorized financial
representative can help you decide which Class may be
most appropriate for you. When purchasing Fund
shares, you must specify which Class of shares you
wish to purchase.
When you buy Fund shares, the shares are purchased at
the next share price calculated, less any applicable
front-end sales charge, after we receive your
purchase order. Your payment is due on the third
business day after you place your purchase order. We
reserve the right to reject any order for the
purchase of Fund shares.
7
<PAGE> 10
EASYINVEST(SM)
A purchase plan that
allows you to transfer
money automatically from
your checking or savings
account or from a Money
Market Fund on a
semi-monthly, monthly or
quarterly basis. Contact
your Morgan Stanley Dean
Witter Financial Advisor
for further information
about this service.
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
------------------------------------------------------------------------------------------
MINIMUM INVESTMENT
----------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Regular Accounts $1,000 $100
------------------------------------------------------------------------------------------
Individual Retirement
Accounts: Regular IRAs $1,000 $100
Education IRAs $500 $100
------------------------------------------------------------------------------------------
EasyInvest(SM) (Automatically from
your checking or
savings account or
Money Market Fund) $100* $100*
------------------------------------------------------------------------------------------
</TABLE>
* Provided your schedule of investments totals $1,000
in twelve months.
There is no minimum investment amount if you purchase
Fund shares through: (1) the Investment Manager's
mutual fund asset allocation plan, (2) a program,
approved by the Fund's distributor, in which you pay
an asset-based fee for advisory, administrative
and/or brokerage services, or (3) employer-sponsored
employee benefit plan accounts.
INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND
OTHER INVESTORS/CLASS D SHARES. To be eligible to
purchase Class D shares, you must qualify under one
of the investor categories specified in the "Share
Class Arrangements" section of this Prospectus.
SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In
addition to buying additional Fund shares for an
existing account by contacting your Morgan Stanley
Dean Witter Financial Advisor, you may send a check
directly to the Fund. To buy additional shares in
this manner:
- Write a "letter of instruction" to the Fund
specifying the name(s) on the account, the
account number, the social security or tax
identification number, the Class of shares you
wish to purchase, and the investment amount
(which would include any applicable front-end
sales charge). The letter must be signed by the
account owner(s).
- Make out a check for the total amount payable to:
Morgan Stanley Dean Witter Equity Fund.
- Mail the letter and check to Morgan Stanley Dean
Witter Trust FSB at P.O. Box 1040, Jersey City,
NJ 07303.
[ARROWS GRAPHIC] HOW TO EXCHANGE SHARES
PERMISSIBLE FUND EXCHANGES. You may exchange shares
of any Class of the Fund for the same Class of any
other continuously offered Multi-Class Fund, or for
shares of a No-Load Fund, Money Market Fund, North
American Government Income Trust or Short-Term U.S.
Treasury Trust, without the imposition of an exchange
fee. See the inside back cover of this Prospectus for
each Morgan Stanley Dean Witter Fund's designation as
a Multi-Class Fund, No-Load Fund or Money Market
Fund. If a Morgan Stanley Dean Witter Fund is not
listed, consult the inside back cover of that Fund's
Prospectus for its designation. For purposes of
exchanges, shares of FSC Funds (subject to a
front-end sales charge) are treated as Class A shares
of a Multi-Class Fund.
Exchanges may be made after shares of the Fund
acquired by purchase have been held for thirty days.
There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. The
current prospectus for each fund describes its
investment objective(s), policies and investment
minimum, and should be read before investment. Since
exchanges are available only into continuously
offered Morgan Stanley Dean Witter Funds, exchanges
are not available into any new
8
<PAGE> 11
Morgan Stanley Dean Witter Fund during its initial
offering period, or when shares of a Morgan Stanley
Dean Witter Fund are not being offered for purchase.
EXCHANGE PROCEDURES. You can process an exchange by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative.
Otherwise, you must forward an exchange privilege
authorization form to the Fund's transfer agent --
Morgan Stanley Dean Witter Trust FSB -- and then
write the transfer agent or call (800) 869-NEWS to
place an exchange order. You can obtain an exchange
privilege authorization form by contacting your
Financial Advisor or other authorized financial
representative or by calling (800) 869-NEWS. If you
hold share certificates, no exchanges may be
processed until we have received all applicable share
certificates.
An exchange to any Morgan Stanley Dean Witter Fund
(except a Money Market Fund) is made on the basis of
the next calculated net asset values of the Funds
involved after the exchange instructions are
accepted. When exchanging into a Money Market Fund,
the Fund's shares are sold at their next calculated
net asset value and the Money Market Fund's shares
are purchased at their net asset value on the
following business day.
The Fund may terminate or revise the exchange
privilege upon required notice. The check writing
privilege is not available for Money Market Fund
shares you acquire in an exchange.
TELEPHONE EXCHANGES. For your protection when calling
Morgan Stanley Dean Witter Trust FSB, we will employ
reasonable procedures to confirm that exchange
instructions communicated over the telephone are
genuine. These procedures may include requiring
various forms of personal identification such as
name, mailing address, social security or other tax
identification number. Telephone instructions also
may be recorded.
Telephone instructions will be accepted if received
by the Fund's transfer agent between 9:00 a.m. and
4:00 p.m. Eastern time, on any day the New York Stock
Exchange is open for business. During periods of
drastic economic or market changes, it is possible
that the telephone exchange procedures may be
difficult to implement, although this has not been
the case with the Fund in the past.
MARGIN ACCOUNTS. If you have pledged your Fund shares
in a margin account, contact your Morgan Stanley Dean
Witter Financial Advisor or other authorized
financial representative regarding restrictions on
the exchange of such shares.
TAX CONSIDERATIONS OF EXCHANGES. If you exchange
shares of the Fund for shares of another Morgan
Stanley Dean Witter Fund there are important tax
considerations. For tax purposes, the exchange out of
the Fund is considered a sale of the Fund's shares --
and the exchange into the other Fund is considered a
purchase. As a result, you may realize a capital gain
or loss.
You should review the "Tax Consequences" section and
consult your own tax professional about the tax
consequences of an exchange.
FREQUENT EXCHANGES. A pattern of frequent exchanges
may result in the Fund limiting or prohibiting, at
its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of
limiting your exchange privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share Class
Arrangements" section of this Prospectus for a
discussion of how applicable contingent deferred
sales charges (CDSCs) are calculated for shares of
one Morgan Stanley Dean Witter Fund that are
exchanged for shares of another.
For further information regarding exchange
privileges, you should contact your Morgan Stanley
Dean Witter Financial Advisor or call (800) 869-NEWS.
9
<PAGE> 12
[HANDSHAKE GRAPHIC] HOW TO SELL SHARES
- ---------------------------------------------
You can sell some or all of your Fund shares at any
time. If you sell Class A, Class B or Class C shares,
your net sale proceeds are reduced by the amount of
any applicable CDSC. Your shares will be sold at the
next price calculated after we receive your order to
sell as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
--------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter
Financial Advisor Financial Advisor or other authorized financial representative.
[PHONE GRAPHIC]
------------------------------------------------------------------
Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
--------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
[LETTER GRAPHIC] instruction" that includes:
- your account number;
- the dollar amount or the number of shares you wish to sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
------------------------------------------------------------------
If you are requesting payment to anyone other than the registered
owner(s) or that payment be sent to any address other than the
address of the registered owner(s) or pre-designated bank
account, you will need a signature guarantee. You can obtain a
signature guarantee from an eligible guarantor acceptable to
Morgan Stanley Dean Witter Trust FSB. (You should contact Morgan
Stanley Dean Witter Trust FSB at (800) 869-NEWS for a
determination as to whether a particular institution is an
eligible guarantor.) A notary public cannot provide a signature
guarantee. Additional documentation may be required for shares
held by a corporation, partnership, trustee or executor.
------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O.
Box 983, Jersey City, New Jersey 07303. If you hold share
certificates, you must return the certificates, along with the
letter and any required additional documentation.
------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the
account is registered, or otherwise according to your
instructions.
--------------------------------------------------------------------------------------------
SYSTEMATIC If your investment in all of the Morgan Stanley Dean Witter
WITHDRAWAL PLAN Family of Funds has a total market value of at least $10,000, you
[ARROWS GRAPHIC] may elect to withdraw amounts of $25 or more, or in any whole
percentage of a Fund's balance (provided the amount is at least
$25), on a monthly, quarterly, semi-annual or annual basis, from
any Fund with a balance of at least $1,000. Each time you add a
Fund to the plan, you must meet the plan requirements.
------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may
be waived under certain circumstances. See the Class B waiver
categories listed in the "Share Class Arrangements" section of
this Prospectus.
------------------------------------------------------------------
To sign up for the systematic withdrawal plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call (800)
869-NEWS. You may terminate or suspend your plan at any time.
Please remember that withdrawals from the plan are sales of
shares, not Fund "distributions," and ultimately may exhaust your
account balance. The Fund may terminate or revise the plan at any
time.
--------------------------------------------------------------------------------------------
</TABLE>
PAYMENT FOR SOLD SHARES. After we receive your
complete instructions to sell as described above, a
check will be mailed to you within seven days,
although we will attempt to make payment within one
business day. Payment may also be sent to your
brokerage account.
Payment may be postponed or the right to sell your
shares suspended under unusual circumstances. If you
request to sell shares that were recently purchased
by check, payment of the sale proceeds may be delayed
for the minimum time needed to verify that the check
has been honored (not more than fifteen days from the
time we receive the check).
10
<PAGE> 13
TAX CONSIDERATIONS. Normally, your sale of Fund
shares is subject to federal and state income tax.
You should review the "Tax Consequences" section of
this Prospectus and consult your own tax professional
about the tax consequences of a sale.
REINSTATEMENT PRIVILEGE. If you sell Fund shares and
have not previously exercised the reinstatement
privilege, you may, within 35 days after the date of
sale, invest any portion of the proceeds in the same
Class of Fund shares at their net asset value and
receive a pro rata credit for any CDSC paid in
connection with the sale.
INVOLUNTARY SALES. The Fund reserves the right, on
sixty days' notice, to sell the shares of any
shareholder (other than shares held in an IRA or
403(b) Custodial Account) whose shares, due to sales
by the shareholder, have a value below $100, or in
the case of an account opened through EasyInvest(SM),
if after 12 months the shareholder has invested less
than $1,000 in the account.
However, before the Fund sells your shares in this
manner, we will notify you and allow you sixty days
to make an additional investment in an amount that
will increase the value of your account to at least
the required amount before the sale is processed. No
CDSC will be imposed on any involuntary sale.
MARGIN ACCOUNTS. If you have pledged your Fund shares
in a margin account, contact your Morgan Stanley Dean
Witter Financial Advisor or other authorized
financial representative regarding restrictions on
the sale of such shares.
[CHECKMARK GRAPHIC] DISTRIBUTIONS
- ----------------------------------------
The Fund passes substantially all of its earnings
from income and capital gains along to its investors
as "distributions." The Fund earns income from stocks
and interest from fixed-income investments. These
amounts are passed along to Fund shareholders as
"income dividend distributions." The Fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These amounts may
be passed along as "capital gain distributions."
The Fund declares income dividends separately for
each Class. Distributions paid on Class A and Class D
shares will be higher than for Class B and Class C
because distribution fees that Class B and Class C
pay are higher. Normally, income dividends are
distributed annually. Capital gains, if any, are
usually distributed in December.
The Fund, however, may retain and reinvest any
long-term capital gains. The Fund may at times make
payments from sources other than income or capital
gains that represent a return of a portion of your
investment.
Distributions are reinvested automatically in
additional shares of the same Class and automatically
credited to your account, unless you request in
writing that all distributions be paid in cash. If
you elect the cash option, the Fund will mail a check
to you no later than seven business days after the
distribution is declared. No interest will accrue on
uncashed checks. If you wish to change how your
distributions are paid, your request should be
received by the Fund's transfer agent, Morgan Stanley
Dean Witter Trust FSB, at least five business days
prior to the record date of the distributions.
TARGETED DIVIDENDS(SM)
You may select to have
your Fund distributions
automatically invested in
other Classes of Fund
shares or Classes of
another Morgan Stanley
Dean Witter Fund that you
own. Contact your Morgan
Stanley Dean Witter
Financial Advisor for
further information about
this service.
11
<PAGE> 14
[1040 GRAPHIC] TAX CONSEQUENCES
- -------------------------------------------
As with any investment, you should consider how your
Fund investment will be taxed. The tax information in
this Prospectus is provided as general information.
You should consult your own tax professional about
the tax consequences of an investment in the Fund.
Unless your investment in the Fund is through a
tax-deferred retirement account, such as a 401(k)
plan or IRA, you need to be aware of the possible tax
consequences when:
- The Fund makes distributions; and
- You sell Fund shares, including an exchange to
another Morgan Stanley Dean Witter Fund.
Taxes on Distributions. Your distributions are
normally subject to federal and state income tax when
they are paid, whether you take them in cash or
reinvest them in Fund shares. A distribution also may
be subject to local income tax. Any income dividend
distributions and any short-term capital gain
distributions are taxable to you as ordinary income.
Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you
have owned shares in the Fund.
Every January, you will be sent a statement (IRS Form
1099-DIV) showing the taxable distributions paid to
you in the previous year. The statement provides full
information on your dividends and capital gains for
tax purposes.
Taxes on Sales. Your sale of Fund shares normally is
subject to federal and state income tax and may
result in a taxable gain or loss to you. A sale also
may be subject to local income tax. Your exchange of
Fund shares for shares of another Morgan Stanley Dean
Witter Fund is treated for tax purposes like a sale
of your original shares and a purchase of your new
shares. Thus, the exchange may, like a sale, result
in a taxable gain or loss to you and will give you a
new tax basis for your new shares.
When you open your Fund account, you should provide
your Social Security or tax identification number on
your investment application. By providing this
information, you will avoid being subject to a
federal backup withholding tax of 31% on taxable
distributions and redemption proceeds. Any withheld
amount would be sent to the IRS as an advance tax
payment.
[BLOCKS GRAPHIC] SHARE CLASS ARRANGEMENTS
- ---------------------------------------------------
The Fund offers several Classes of shares having
different distribution arrangements designed to
provide you with different purchase options according
to your investment needs. Your Morgan Stanley Dean
Witter Financial Advisor or other authorized
financial representative can help you decide which
Class may be appropriate for you.
The general public is offered three Classes: Class A
shares, Class B shares and Class C shares, which
differ principally in terms of sales charges and
ongoing expenses. A fourth Class, Class D shares, is
offered only to a limited category of investors.
Shares that you acquire through reinvested
distributions will not be subject to any front-end
sales charge or CDSC -- contingent deferred sales
charge. Sales personnel may receive different
compensation for selling each Class of shares. The
sales charges applicable to each Class provide for
the distribution financing of shares of that Class.
12
<PAGE> 15
The chart below compares the sales charge and the
maximum annual 12b-1 fees applicable to each Class:
<TABLE>
<CAPTION>
MAXIMUM
CLASS SALES CHARGE ANNUAL 12b-1 FEE
------------------------------------------------------------------------------------------------
<S> <C> <C>
A Maximum 5.25% initial sales charge reduced for purchase of
$25,000 or more; shares sold without an initial sales charge are
generally subject to a 1.0% CDSC during first year. 0.25%
------------------------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing to 0%
after six years. 1.0%
------------------------------------------------------------------------------------------------
C 1.0% CDSC during first year 1.0%
------------------------------------------------------------------------------------------------
D None None
------------------------------------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset
value plus an initial sales charge of up to 5.25%.
The initial sales charge is reduced for purchases of
$25,000 or more according to the schedule below.
Investments of $1 million or more are not subject to
an initial sales charge, but are generally subject to
a contingent deferred sales charge, or CDSC, of 1.0%
on sales made within one year after the last day of
the month of purchase. The CDSC will be assessed in
the same manner and with the same CDSC waivers as
with Class B shares. Class A shares are also subject
to a distribution (12b-1) fee of up to 0.25% of the
average daily net assets of the Class.
The offering price of Class A shares includes a sales
charge (expressed as a percentage of the offering
price) on a single transaction as shown in the
following table:
FRONT-END SALES CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges - the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
--------------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF AMOUNT INVESTED
-----------------------------------------------------------------------------------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
-----------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
-----------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
-----------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
-----------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
-----------------------------------------------------------------------------------------
$1 million and over 0% 0%
-----------------------------------------------------------------------------------------
</TABLE>
The reduced sales charge schedule is applicable to
purchases of Class A shares in a single transaction
by:
- A single account (including an individual, trust
or fiduciary account).
- Family member accounts (limited to husband, wife
and children under the age of 21).
- Pension, profit sharing or other employee benefit
plans of companies and their affiliates.
- Tax-exempt organizations.
- Groups organized for a purpose other than to buy
mutual fund shares.
13
<PAGE> 16
COMBINED PURCHASE PRIVILEGE. You also will have the
benefit of reduced sales charges by combining
purchases of Class A shares of the Fund in a single
transaction with purchases of Class A shares of other
Multi-Class Funds and shares of FSC Funds.
RIGHT OF ACCUMULATION. You also may benefit from a
reduction of sales charges, if the cumulative net
asset value of Class A shares of the Fund purchased
in a single transaction, together with shares of
other Funds you currently own which were previously
purchased at a price including a front-end sales
charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or
more. Also, if you have a cumulative net asset value
of all your Class A and Class D shares equal to at
least $5 million (or $25 million for certain employee
benefit plans), you are eligible to purchase Class D
shares of any Fund subject to the Fund's minimum
initial investment requirement.
You must notify your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial
representative, (or Morgan Stanley Dean Witter Trust
FSB if you purchase directly through the Fund) at the
time a purchase order is placed, that the purchase
qualifies for the reduced charge under the Right of
Accumulation. Similar notification must be made in
writing when an order is placed by mail. The reduced
sales charge will not be granted if: (i) notification
is not furnished at the time of the order; or (ii) a
review of the records of Dean Witter Reynolds or
other authorized dealer of Fund shares or the Fund's
transfer agent does not confirm your represented
holdings.
LETTER OF INTENT. The schedule of reduced sales
charges for larger purchases also will be available
to you if you enter into a written "letter of
intent." A letter of intent provides for the purchase
of Class A shares of the Fund or other Multi-Class
Funds or shares of FSC Funds within a thirteen-month
period. The initial purchase under a letter of intent
must be at least 5% of the stated investment goal. To
determine the applicable sales charge reduction, you
may also include: (1) the cost of shares of other
Morgan Stanley Dean Witter Funds which were
previously purchased at a price including a front-end
sales charge during the 90-day period prior to the
distributor receiving the letter of intent, and (2)
the cost of shares of other Funds you currently own
acquired in exchange for shares of Funds purchased
during that period at a price including a front-end
sales charge. You can obtain a letter of intent by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative,
or by calling (800) 869-NEWS. If you do not achieve
the stated investment goal within the thirteen-month
period, you are required to pay the difference
between the sales charges otherwise applicable and
sales charges actually paid, which may be deducted
from your investment.
OTHER SALES CHARGE WAIVERS. In addition to
investments of $1 million or more, your purchase of
Class A shares is not subject to a front-end sales
charge (or a CDSC upon sale) if your account
qualifies under one of the following categories:
- A trust for which Morgan Stanley Dean Witter Trust
FSB provides discretionary trustee services.
- Persons participating in a fee-based investment
program (subject to all of its terms and
conditions, including mandatory sale or transfer
restrictions on termination) approved by the
Fund's distributor pursuant to which they pay an
asset based fee for investment advisory,
administrative and/or brokerage services.
14
<PAGE> 17
- Employer-sponsored employee benefit plans, whether
or not qualified under the Internal Revenue Code,
for which Morgan Stanley Dean Witter Trust FSB
serves as trustee or Dean Witter Reynolds'
Retirement Plan Services serves as recordkeeper
under a written Recordkeeping Services Agreement
("MSDW Eligible Plans") which have at least 200
eligible employees.
- A MSDW Eligible Plan whose Class B shares have
converted to Class A shares, regardless of the
plan's asset size or number of eligible employees.
- A client of a Morgan Stanley Dean Witter Financial
Advisor who joined us from another investment firm
within six months prior to the date of purchase of
Fund shares, and you used the proceeds from the
sale of shares of a proprietary mutual fund of
that Financial Advisor's previous firm that
imposed either a front-end or deferred sales
charge to purchase Class A shares, provided that:
(1) you sold the shares not more than 60 days
prior to purchase, and (2) the sale proceeds were
maintained in the interim in cash or a money
market fund.
- Current or retired Directors/Trustees of the
Morgan Stanley Dean Witter Funds, such persons'
spouses and children under the age of 21, and
trust accounts for which any of such persons is a
beneficiary.
- Current or retired directors, officers and
employees of Morgan Stanley Dean Witter & Co. and
any of its subsidiaries, such persons' spouses and
children under the age of 21, and trust accounts
for which any of such persons is a beneficiary.
CLASS B SHARES Class B shares are offered at net
asset value with no initial sales charge but are
subject to a contingent deferred sales charge, or
CDSC, as set forth in the table below. For the
purpose of calculating the CDSC, shares are deemed to
have been purchased on the last day of the month
during which they were purchased.
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you hold
your shares as set forth in the table.
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE CDSC AS A PERCENTAGE
PAYMENT MADE OF AMOUNT REDEEMED
---------------------------------------------------------------
<S> <C>
First 5.0%
---------------------------------------------------------------
Second 4.0%
---------------------------------------------------------------
Third 3.0%
---------------------------------------------------------------
Fourth 2.0%
---------------------------------------------------------------
Fifth 2.0%
---------------------------------------------------------------
Sixth 1.0%
---------------------------------------------------------------
Seventh and thereafter None
---------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange
shares, shares with no CDSC will be sold or exchanged
first, then shares with the lowest CDSC will be sold
or exchanged next. For any shares subject to a CDSC,
the CDSC will be assessed on an amount equal to the
lesser of the current market value or the cost of the
shares being sold.
15
<PAGE> 18
CDSC WAIVERS. A CDSC, if otherwise applicable, will
be waived in the case of:
- Sales of shares held at the time you die or become
disabled (within the definition in Section
72(m)(7) of the Internal Revenue Code which
relates to the ability to engage in gainful
employment), if the shares are: (i) registered
either in your name (not a trust) or in the names
of you and your spouse as joint tenants with right
of survivorship; or (ii) held in a qualified
corporate or self-employed retirement plan, IRA or
403(b) Custodial Account, provided in either case
that the sale is requested within one year of your
death or initial determination of disability.
- Sales in connection with the following retirement
plan "distributions": (i) lump-sum or other
distributions from a qualified corporate or
self-employed retirement plan following retirement
(or, in the case of a "key employee" of a "top
heavy" plan, following attainment of age 59 1/2);
(ii) distributions from an IRA or 403(b) Custodial
Account following attainment of age 59 1/2; or
(iii) a tax-free return of an excess IRA
contribution (a "distribution" does not include a
direct transfer of IRA, 403(b) Custodial Account
or retirement plan assets to a successor custodian
or trustee).
- Sales of shares held for you as a participant in a
MSDW Eligible Plan.
- Sales of shares in connection with the Systematic
Withdrawal Plan of up to 12% annually of the value
of each Fund from which plan sales are made. The
percentage is determined on the date you establish
the Systematic Withdrawal Plan and based on the
next calculated share price. You may have this
CDSC waiver applied in amounts up to 1% per month,
3% per quarter, 6% semi-annually or 12% annually.
Shares with no CDSC will be sold first, followed
by those with the lowest CDSC. As such, the waiver
benefit will be reduced by the amount of your
shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may
later resume plan payments without requiring a new
determination of the account value for the 12%
CDSC waiver.
All waivers will be granted only following the Fund's
distributor receiving confirmation of your
entitlement. If you believe you are eligible for a
CDSC waiver, please contact your Financial Advisor or
call (800) 869-NEWS.
DISTRIBUTION FEE. Class B shares are subject to an
annual 12b-1 fee of 1.0% of the net assets of Class
B.
CONVERSION FEATURE. After ten (10) years, Class B
shares will convert automatically to Class A shares
of the Fund with no initial sales charge. The ten
year period runs from the last day of the month in
which the shares were purchased, or in the case of
Class B shares acquired through an exchange, from the
last day of the month in which the original Class B
shares were purchased; the shares will convert to
Class A shares based on their relative net asset
values in the month following the ten year period. At
the same time, an equal proportion of Class B shares
acquired through automatically reinvested
distributions will convert to Class A shares on the
same basis. (Class B shares acquired in exchange for
shares of another Morgan Stanley Dean Witter Fund
originally purchased before May 1, 1997, however,
will convert to Class A shares in May 2007.)
In the case of Class B shares held in a MSDW Eligible
Plan, the plan is treated as a single investor and
all Class B shares will convert to Class A shares on
the conversion date of the Class B shares of a Morgan
Stanley Dean Witter Fund purchased by that plan.
16
<PAGE> 19
Currently, the Class B share conversion is not a
taxable event; the conversion feature may be
cancelled if it is deemed a taxable event in the
future by the Internal Revenue Service.
If you exchange your Class B shares for shares of a
Money Market Fund, a No-Load Fund, North American
Government Income Trust or Short-Term U.S. Treasury
Trust, the holding period for conversion is frozen as
of the last day of the month of the exchange and
resumes on the last day of the month you exchange
back into Class B shares.
EXCHANGING SHARES SUBJECT TO A CDSC. There are
special considerations when you exchange Fund shares
that are subject to a CDSC. When determining the
length of time you held the shares and the
corresponding CDSC rate, any period (starting at the
end of the month) during which you held shares of a
fund that does not charge a CDSC will not be counted.
Thus, in effect the "holding period" for purposes of
calculating the CDSC is frozen upon exchanging into a
fund that does not charge a CDSC.
For example, if you held Class B shares of the Fund
for one year, exchanged to Class B of another Morgan
Stanley Dean Witter Multi-Class Fund for another
year, then sold your shares, a CDSC rate of 4% would
be imposed on the shares based on a two year holding
period - one year for each Fund. However, if you had
exchanged the shares of the Fund for a Money Market
Fund (which does not charge a CDSC) instead of the
Multi-Class Fund, then sold your shares, a CDSC rate
of 5% would be imposed on the shares based on a one
year holding period. The one year in the Money Market
Fund would not be counted. Nevertheless, if shares
subject to a CDSC are exchanged for a fund that does
not charge a CDSC, you will receive a credit when you
sell the shares equal to the distribution (12b-1)
fees you paid on those shares while in that Fund up
to the amount of any applicable CDSC.
In addition, shares that are exchanged into or from a
Morgan Stanley Dean Witter Fund subject to a higher
CDSC rate will be subject to the higher rate, even if
the shares are re-exchanged into a Fund with a lower
CDSC rate.
CLASS C SHARES Class C shares are sold at net asset
value with no initial sales charge but are subject to
a CDSC of 1.0% on sales made within one year after
the last day of the month of purchase. The CDSC will
be assessed in the same manner and with the same CDSC
waivers as with Class B shares.
DISTRIBUTION FEE. Class C shares are subject to an
annual distribution (12b-1) fee of up to 1.0% of the
average daily net assets of that Class. The Class C
shares' distribution fee may cause that Class to have
higher expenses and pay lower dividends than Class A
or Class D shares. Unlike Class B shares, Class C
shares have no conversion feature and, accordingly,
an investor that purchases Class C shares may be
subject to distribution (12b-1) fees applicable to
Class C shares for an indefinite period.
CLASS D SHARES Class D shares are offered without any
sales charge on purchases or sales and without any
distribution (12b-1) fee. Class D shares are offered
only to investors meeting an initial investment
minimum of $5 million ($25 million for MSDW Eligible
Plans) and the following categories of investors:
- Investors participating in the Investment
Manager's mutual fund asset allocation program
(subject to all of its terms and conditions,
including mandatory sale or transfer restrictions
on termination) pursuant to which they pay an
asset-based fee.
17
<PAGE> 20
- Persons participating in a fee-based investment
program (subject to all of its terms and
conditions, including mandatory sale or transfer
restrictions on termination) approved by the
Fund's distributor pursuant to which they pay an
asset based fee for investment advisory,
administrative and/or brokerage services.
- Employee benefit plans maintained by Morgan
Stanley Dean Witter & Co. or any of its
subsidiaries for the benefit of certain employees
of Morgan Stanley Dean Witter & Co. and its
subsidiaries.
- Certain unit investment trusts sponsored by Dean
Witter Reynolds.
- Certain other open-end investment companies whose
shares are distributed by the Fund's distributor.
- Investors who were shareholders of the Dean Witter
Retirement Series on September 11, 1998 for
additional purchases for their former Dean Witter
Retirement Series accounts.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5
million ($25 million for MSDW Eligible Plans) initial
investment to qualify to purchase Class D shares you
may combine: (1) purchases in a single transaction of
Class D shares of the Fund and other Morgan Stanley
Dean Witter Multi-Class Funds and/or (2) previous
purchases of Class A and Class D shares of
Multi-Class Funds and shares of FSC Funds you
currently own, along with shares of Morgan Stanley
Dean Witter Funds you currently own that you acquired
in exchange for those shares.
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If
you receive a cash payment representing an income
dividend or capital gain and you reinvest that amount
in the applicable Class of shares by returning the
check within 30 days of the payment date, the
purchased shares would not be subject to an initial
sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has
adopted a Plan of Distribution in accordance with
Rule 12b-1 under the Investment Company Act of 1940
with respect to the distribution of Class A, Class B
and Class C shares. The Plan allows the Fund to pay
distribution fees for the sale and distribution of
these shares. It also allows the Fund to pay for
services to shareholders of Class A, Class B and
Class C shares. Because these fees are paid out of
the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment
in these Classes and may cost you more than paying
other types of sales charges.
18
<PAGE> 21
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the period July 29, 1998 through May
31, 1999. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate an
investor would have earned or lost on an investment in the Fund
(assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the Fund's financial
statements, is included in the annual report, which is available upon
request.
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
FOR THE PERIOD JULY 29, 1998*
SELECTED PER-SHARE DATA++: THROUGH MAY 31, 1999
------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 10.00
==============================================================================
Income (loss) from investment operations:
Net investment income (loss) (0.07)
Net realized and unrealized gain 1.76
Total income from investment operations 1.69
==============================================================================
Net asset value, end of period $ 11.69
==============================================================================
TOTAL RETURN+(1) 16.90%
==============================================================================
RATIOS TO AVERAGE NET ASSETS(2)(3):
------------------------------------------------------------------------------
Expenses 2.13%
------------------------------------------------------------------------------
Net investment income (loss) (0.68)%
==============================================================================
SUPPLEMENTAL DATA:
------------------------------------------------------------------------------
Net assets, end of period, in thousands $ 273,345
------------------------------------------------------------------------------
Portfolio turnover rate(1) 80%
------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ The per share amounts were computed using an average number of
shares outstanding.
+ Does not reflect the deduction of sales charge. Calculated based on
the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.
19
<PAGE> 22
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------
FOR THE PERIOD JULY 29, 1998*
SELECTED PER-SHARE DATA++: THROUGH MAY 31, 1999
-----------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 10.00
=============================================================================
Income (loss) from investment operations:
Net investment income (loss) 0.01
Net realized and unrealized gain 1.75
Total income from investment operations 1.76
-----------------------------------------------------------------------------
Net asset value, end of period $ 11.76
=============================================================================
TOTAL RETURN+(1) 17.60%
=============================================================================
RATIOS TO AVERAGE NET ASSETS(2)(3):
-----------------------------------------------------------------------------
Expenses 1.38%
-----------------------------------------------------------------------------
Net investment income (loss) 0.07%
=============================================================================
SUPPLEMENTAL DATA:
-----------------------------------------------------------------------------
Net assets, end of period, in thousands $ 7,933
-----------------------------------------------------------------------------
Portfolio turnover rate(1) 80%
-----------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ The per share amounts were computed using an average number of
shares outstanding.
+ Does not reflect the deduction of sales charge. Calculated based on
the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
CLASS C
---------------------------------------------------------------------------
FOR THE PERIOD JULY 29, 1998*
SELECTED PER-SHARE DATA++: THROUGH MAY 31, 1999
---------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 10.00
===========================================================================
Income (loss) from investment operations:
Net investment income (loss) (0.04)
Net realized and unrealized gain 1.74
Total income from investment operations 1.70
---------------------------------------------------------------------------
Net asset value, end of period $ 11.70
===========================================================================
TOTAL RETURN+(1) 17.10%
===========================================================================
RATIOS TO AVERAGE NET ASSETS(2)(3):
---------------------------------------------------------------------------
Expenses 1.91%
---------------------------------------------------------------------------
Net investment income (loss) (0.46)%
===========================================================================
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------
Net assets, end of period, in thousands $ 15,744
---------------------------------------------------------------------------
Portfolio turnover rate(1) 80%
---------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ The per share amounts were computed using an average number of
shares outstanding.
+ Does not reflect the deduction of sales charge. Calculated based on
the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.
20
<PAGE> 23
<TABLE>
<CAPTION>
CLASS D
------------------------------------------------------------------------------------
FOR THE PERIOD JULY 29, 1998*
SELECTED PER-SHARE DATA++: THROUGH MAY 31, 1999
------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $10.00
====================================================================================
Income (loss) from investment operations:
Net investment income (loss) 0.03
Net realized and unrealized gain 1.76
Total income from investment operations 1.79
------------------------------------------------------------------------------------
Net asset value, end of period $11.79
====================================================================================
TOTAL RETURN+(1) 17.90%
====================================================================================
RATIOS TO AVERAGE NET ASSETS(2)(3):
------------------------------------------------------------------------------------
Expenses 1.13%
------------------------------------------------------------------------------------
Net investment income (loss) 0.32%
====================================================================================
SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------
Net assets, end of period, in thousands $ 69
------------------------------------------------------------------------------------
Portfolio turnover rate(1) 80%
------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ The per share amounts were computed using an average number of
shares outstanding.
+ Does not reflect the deduction of sales charge. Calculated based on
the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.
21
<PAGE> 24
NOTES
22
<PAGE> 25
NOTES
23
<PAGE> 26
NOTES
24
<PAGE> 27
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on in and
meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Growth Fund
Market Leader Trust
Mid-Cap Equity Trust
Small Cap Growth Fund
Special Value Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
International Fund
International SmallCap Fund
Japan Fund Latin American Growth Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Equity Fund
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Total Market Index Fund
Total Return Trust Value Fund
Value-Added Market Series/Equity Portfolio
THEME FUNDS
Global Utilities Fund
Real Estate Fund
Utilities Fund
GLOBAL FUNDS
Global Dividend Growth Securities
- --------------------------------------------------------------------------------
INCOME FUNDS
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund(NL)
GLOBAL INCOME FUNDS
North American Government Income Trust
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust(FSC)
Limited Term Municipal Trust(NL)
Multi-State Municipal Series Trust(FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund(MM)
U.S. Government Money Market Trust(MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust(MM)
New York Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
There may be Funds created after this Prospectus was published. Please consult
the inside back cover of a new Fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of Funds are:
NL -- No-Load (Mutual) Fund; MM -- Money Market Fund; FSC -- A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.
<PAGE> 28
MORGAN STANLEY DEAN WITTER
EQUITY FUND
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information also provides additional information
about the Fund. The Statement of Additional Information is incorporated herein
by reference (legally is part of this Prospectus). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
www.msdw.com/individual/funds
Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov), and copies of this information may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC, Washington,
DC 20549-6009.
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-49585)
